Scott Wapner (3:10)

Okay, I thought there was an interesting exchange on Squawk Box this morning in Davos between the CEO of UBS and our own Joe Kernan about what all of this means for markets, whether more volatility is in fact in order and how investors should react to it. Listen, I don't see any path of normalization in the near future.

Josh Brown (3:34)

When you say path of normalization, I.

Joe Terranova (3:36)

Mean path of normalization of lower volatility and more stability.

Scott Wapner (3:40)

I'll take another year in 2026, like 2025 and 2024, volatility notwithstanding, though, I mean, there are tailwinds for the globe.

Josh Brown (3:51)

Correct?

Scott Wapner (3:51)

There are tailwinds.

Josh Brown (3:52)

I mean, look, you know, one could.

Brian Belsky (3:53)

Say 2025 was a great year, so, you know, welcome for financial markets.

Scott Wapner (3:58)

But again.

Brian Belsky (4:01)

Some of these topics are starting to wait on. It could be noise like it was last year.

Scott Wapner (4:09)

I mean, Liberation Day was the best buying opportunity we had all year on April 4th. Okay, so, Liz, I think Joe has a point. Some will say they're exhausted by the erratic decision making and the social media posts on policy, the threats, et cetera, which are causing volatility and more uncertainty. However, should you, which I think was Joe's point, should you tune out the noise and remember what felt like Sell America last April was actually buy a great buying opportunity. And just like then, the silliness of Liberation Day, this isn't going to get to the most extreme place. Earnings are going to be good. The economy is going to grow more than people think. The Fed's going to cut rates, and thus you should buy stocks at any moment of extreme volatility. Like if you want to characterize today as buy stocks.

Liz Thomas (5:03)

I do agree with that. At any moment of extreme volatility. I don't know that we're in an extreme moment right now. That has lasted long enough to say that. And I also wouldn't say it with a paint it with a broad brush and say you just go buy risk assets in general. I think right now there still has been a big difference between some of the sectors that are still working and some of the industry groups that are still working. Tech is really the odd one out there. We've got tech not really participating in a broadening trade even ins outside the sector itself. So there's been a lot of pain in tech. I think, for example, you could buy something like software during this volatility. It's really taken it on the chin. And if the idea is adoption for the rest of 2026, software has to have a part in that adoption. Now it still could go down further, but I think that software is a decent opportunity here. That all being said, the market is still sending signals that are pretty stable. We still have cyclicals leading the bunch. We still have investor appetite for things like industrials, materials, energy. So I don't think we can ignore that. And I still think the market is not entirely freaked out by this. Yes, we're having a down day, but I think we're downplaying it and trying to look at it rationally too. Let's just wait and see how this actually plays out. The last thing I'll say is I absolutely agree with Joe. The story of the day today is treasury yields and that will continue to be the story until this volatility ends.

Scott Wapner (6:27)

So Josh, you could easily say that Mr. Ahmadi of UBS and Mr. Kernan of CNBC are both right, that yes, there may be a longer path to normalization of volatility in the near future, depending on what policy is done and where and what threats happen and where and when, etc. And it should still be all viewed as noise and that there are a lot of tailwinds behind this stock market and those are the things that should be focused on more than anything else. How would you assess that?

Josh Brown (7:02)

Yeah, Scott, I think it's a, it's a good framing. They could be, they could both be right. And by the way, anybody can win any market argument by just changing the time frame. So you know, it's, you could have it, you could have a market sell off 20% and then not recover for two years and then recover in year three and say, see, the smart thing to do is not panic. That doesn't mean right after it falls 20% the person who says don't panic looks right. They're going to look like an idiot So I think it's most helpful to just point out a couple of things. This is not truly a volatile environment. Like no offense, I got 4s and P sectors that are green today. I'd also point out last year the S and p did almost 20% in total return. We had a full blown 20% correction, pretty much bear market even though it was short lived. We also separately had a Vix spike to 50. And people forget one of the things that happened last year. The Japanese stock market had like a 1987. We just decided not to talk about it the next day. So I don't really know what normalization is in the, in the, in the mind of, for example, someone from ubs. I don't really know what it means to Joe Kernan. I would just tell you like this is normal. We have these freak outs, we have these panics. If you want to take your portfolio and act like it's 1937 and we're about to invade Denmark, we're going to fight a war against Legoland, you're, you're very welcome to do that. We in the wealth management community don't behave that way. So gold is great. It acts, it acts really well. It acts really well. Energy stocks are up today. We've been, I've been talking about a Joe too for three weeks now, ad nauseum. Oil could be this year's gold. Like there are things that are offsetting whatever's going on with your software stocks. And that's what it means to manage a portfolio and be an adult.

Scott Wapner (8:58)

But you know, Belsky, I think if, if I think to expand on Kernan's point, if you would have gotten all worked up on the deep seek day where tech falls out of bed, a lot of people on the desk and otherwise are saying, hey, this could mean this. What if this happens? That moment was a buy if on liberation Day, you got all upset, worked up by holding up those big placards with the big numbers and said, man, what if this could. That proved to be a great buying opportunity as most of the dips in this market over the last year have proved to be. The broader point being a lot of it ends up being noise. And the environment for buying stocks, I hear from most people, hard to find bears around continues to be great for all the reasons that I said. Earnings, interest rates are going to come down. Deregulation, more deals. I could go on. What do you think?

Brian Belsky (10:00)

There's two different buckets that we're talking about. Number one, the new norm, unfortunately is binary trading. Buy, sell, green, red. And it's been going on since COVID for all intents and purposes. And I can even make a case, Scott, that has been going on since 2009 in terms of this buying, selling, that's what we're doing. From a longer term perspective, if you take a look at the tailwinds versus the headwinds, this is a headwind today. This is an absolute headwind with this behavior and the news flow and things like that. But the tailwinds, you did an amazing job talking about what the tailwinds are. We are transitioning from a multiple driven market to an earnings driven market. In earnings driven markets, historically it's still positive, but the returns are less. With respect to normalization and our mutual friend Joe Kernan. Oh, my gosh, I would love to have a normal market. We have not had a normal market for all intents and purposes since 1995. 96, where it was fundamentally driven, where you had this broader display. I do believe that it's excessively positive, as Joe talked about, with respect to small caps doing well. I think we're going to broaden out the market's telling you that. So headwind, short term, longer term, tailwinds are still very much.

Scott Wapner (11:15)

The point is like, is this an ignore the noise market? That's the question that every investor needs to think about on a day like today at periods like this. Treasury Secretary Bessen was on CNBC earlier said, take a deep breath, do not escalate. President Trump has a strategy, whether you believe that or not. That's what he said. By the way, the president and Joe Kernan will be speaking together tomorrow. Joe's going to interview President Trump. That is tomorrow. And you will hear some of that interview, of course, throughout most of the afternoon. Tomorrow, Liz mentioned look at software. I'm trying to think of people who are looking at days like today and thinking of opportunity like you. Who bought Twilio back?

Joe Terranova (12:01)

I did.

Scott Wapner (12:02)

You've had a long history with this name. It's down like 15% or something like that in the last month.

Joe Terranova (12:07)

Trading it.

Scott Wapner (12:08)

Why did you buy it?

Joe Terranova (12:08)

I'm trading it. I'm being tactical. You're speaking about noise. The noise, as I said, that's troubling is yields the noise as it relates to the tweets. You pay attention to that noise because it's an actually an opportunity. So in the case of Twilio, this is a company that has outperformed the software industry over the last 12 months by about 10%. So it has relative outperformance which obviously I find appealing. In addition to that in being tactical technically the stock broke out. I rode that breakout at the end of the fourth quarter. I bought this name in early December, somewhere around 130 in January when I saw that software was not going to see the mean reversion relative to semis and that the entire industry was going to get punished, I sold out of it at 137. Here we go. The stock approaches the 200 day moving average today which remains supportive at 115. My buyer at 119 with a very small risk and a really good point of reference below because I want to take advantage of the noise.

Scott Wapner (13:16)

Brian Tech is leading the sell off today, not surprisingly as yields pop Tech traditionally sells off. Dan Ives today says the bark will be worse than the bite. Goes to the broader point that we started the program with says he would be buying many of the Ives AI. 30 names on the weakness today and many of these names are down. Nvidia, Microsoft, Palantir, CrowdStrike, Nebbys, Apple, Palo Alto, Google, Tesla. Will the bark be worse than the bite? Do you agree with Ives buying opportunity for any of these names today?

Brian Belsky (13:47)

I love Danny. As you know, Dan loves everything and he and I argue about things sometimes but I think tech had a precursor with respect to how it acted in the fourth quarter. We started to see increased dispersion and differing performance within the tech sector. Liz talked a little bit about it. Not all tech stocks are created equal. I think it might be too early. It might be buying a value trap in software quite frankly. But I think from a thematic perspective Dan is right in terms of focusing in on those particular names but not this is not a rising tide market anymore in tech, Scott and I think that's what's going to be very different about 2026.

Scott Wapner (14:22)

No, I mean look, the Wall Street Journal was talking about how the Mag 7 had driven markets for an extended period of time. Now they are pulling in different directions. Josh, we talked about that. They're not trading as a cohort, a monolith anymore. They are going in different directions based on who's got the best news coming out on where the best ROI is that Amazon, Alphabet, Microsoft and Meta, they are the hyperscalers. Nvidia has its own role and Apple has its but don't expect these stocks to trade in one big group anymore. That the honeymoon in a sense according to Deutsche bank is over. That now it's going to be more differentiated.

Josh Brown (15:07)

Scott, you absolutely nailed it. That's. I'm smiling because I Couldn't have said it any better. And it's so funny now to watch the people who were bearish on the market or talking about the problems of the ETFs, etc. Etc. So what are you going to tell me now, tough guy? In other words, oh, this was so problematic that all seven of these stocks were stealing the headlines. They were stealing all the market cap. They were dominating the whole market. They were going up every day indiscriminately. All of those adjectives that were used to describe that bull market. That bull market effectively ended on a relative basis in October max 7 as a ratio chart with the, with the Spy wrote about this over the weekend. It ended in October. It's been almost four months where those stocks have not been dominating the S and P performance wise. And if you had this huge problem with being bullish last year because the Mag 7 were sucking up all the money, blah, blah, blah. Well, are you mad now or do you like this? You want to say something positive because here, Apple in an 8% drawdown. Alphabet up 5% year to date, up another 1%. Down 1% today, looking way better than the others in video down 3% today. Nvidia is negative on the year. You've got separation between the software side and the semi side. So that's good, right? There's your dispersion. I guess it's not manipulation by ETFs after all. Is anyone that was keeping you out of the market for three years going to remark that, oh, okay, maybe this is healthy, maybe this is a positive development or they moving the goalposts, they're mad about something else? I don't know, I guess we'll find out together.

Scott Wapner (16:46)

You just, Joe, have to be a little more specific, I guess, tactical to the word that you've been using. And in a lot of these names, Citigroup cuts Apple, by the way, to 315. They reiterate their buy. Deutsche raises Alphabet to 370. They reiterate thereby Baird raises Alphabet to 350. They reiterate their outperform. TD Cowan. They do cut Microsoft Target today, not by much. It was 655. At 625 they still though Joe tell you to buy it.

Joe Terranova (17:14)

I think if you look at the earnings growth of these companies over the last several years, no one can question the fundamental momentum that's in place for all of these names. And I said at the end of the summer, where I thought they were from a positioning standpoint was they were mature. They were mature from the standpoint of who's left to own these names. So I think what's happened now in 2026 is you have had this paradigm shift that began in the fourth quarter and you had three consecutive years in which the S and P outperformed the equal weighted S and P by at least 8%. You had not seen that type of consistent three year outperformance since the 90s. And what happened on the other side is you had six years of equal weight outperformance relative to the S and P. So I really think that's where we are right now. Look, I will say it. I bought more of my ETF today because it's equally weighted and I want to buy my own and own my own home cooking. And I think the theme of being equally weighted is going to be a dominant theme in 2016. It doesn't mean you want to push the Max 7 to the side. Right now the momentum is clearly in Amazon and Alphabet, and at some point in 26 it's going to switch somewhere else because the fundamentals are really strong for these names. Maybe it goes to Apple, but universally I don't think in 26 they're going to have the type of outperformance that we've seen from these companies the last three years.

Scott Wapner (18:35)

It's been an equal weight cut of market to start this year. You believe in that?

Liz Thomas (18:40)

I absolutely believe in that. And so I wrote my 2026 outlook by laying out what are the big concerns that investors have. One of the biggest ones was concentration. We're sort of alleviating that concern by what's going on in the market right now, having other sectors come and carry their weight. I made calls for things like health care and materials, consumer staples, the sectors that had lagged. And that is coming to fruition, at least partly already this year. So I do think that that is what's going to play out this year. I think equal weighting is the way to play the large cap space. And if we are just later in the cycle than we were before, large caps should do well later in the cycle. And if we're losing some steam in the names that brought us to this part of the cycle, that's okay as long as it's being picked up by other names, which is exactly what's happening. So I think in a lot of ways this is really what everybody wanted to happen.

Scott Wapner (19:32)

All right, let's talk about a big name that does report earnings after the bell today. Let's take a look at shares of Netflix, which are down 14% since announcing that initial bid for WBD back in December. The stock is moving today as they have amended their offer for WBD to all cash. So they're going to report. Josh, I'll give you the first word here because the day that this deal was announced, at least the offer was announced, you sold, I think, half the position. Maybe I'm wrong, but I know you sold some because you thought it was going to be in the penalty box or purgatory for a while. Not able to do all that much. So what do you think here? As we're about to get these numbers in a matter of hours, I take.

Josh Brown (20:19)

My position down by 85%. I don't want to be completely out of the stock, but I. I just was mindful of, like, how long this is going to take, how controversial it could potentially be, and hopefully it's not that way and I can come back into the name with a full position. I just didn't feel like having money tied up in like a purgatory thing with political fights and all that stuff. I'm not a merger arbitrage person. I do think this was a checkmate move. I think it's probably the thing that will ensure that Netflix will end up with Warner Brothers. Whether or not you want them to is a separate conversation. But the key advantage that they have here to just solidify the fact that they are the better bid for Warner Brothers. Obviously, like Hollywood's going to be upset either way, is that there's absolutely no question of the provenance of the financing. There's nothing going on with Middle East. There's no contingencies. It's not about somebody, some billionaire having to backstop it. So I just think, like, this is the way that Netflix makes. So the board literally has to just make sure that this goes through and the shareholders have no questions. So my personal opinion is that this is a much worse situation for Paramount than it is definitely meaningful for Netflix right now. Once the deal closes, I think people will get positive about it, but we're so far away. I think tonight's earnings report will be a great update. It's not going to be the thing this stock moves based on.

Scott Wapner (21:47)

What do you think about that, Brian? You own the stock as well?

Brian Belsky (21:49)

No, we own both. So we're winning on the Warner Brothers side. And the reason why we bought Warner Brothers in the first place because of our broader theme of cash content.

Scott Wapner (21:58)

What's the most important selling, do you think?

Brian Belsky (22:01)

Subscriber growth. And just to set more consistency on the revenue side, that we're going to see the first half of 2026. That's number one. Number two, I've always seen said for years that you always want to see consolidation with cash. We like it better when companies buy other companies with cash and so they've simplified the process. This makes it much more cleaner and we feel a lot better about it.

Scott Wapner (22:23)

I want to talk about the financials as well today on this report that the White House is weighing executive action on the credit card rate capping of it. Visa, MasterCard, American Express. Joe had been the ones that had been down a bunch. We could take a look at those, those names today. I would assume that they are lower. They are across the board. The American Bankers association says the proposed 10% cap would result in up to 159 million Americans losing access to credit year to date. The stocks are all down on a day where you do have targets going up for Goldman and Morgan Stanley. So how do you assess this group here?

Joe Terranova (23:03)

Synchrony Financial is really the one that has been punished the most. And full disclosure, obviously we own it in the ETF. January 20th was the deadline, wasn't it? I believe it was. Well, we talked about the existence of deadlines and my belief that what ultimately will happen is that you will see a series of meetings and conversation with the president and executives of these credit card companies and big banks and there'll be a resolution that'll be push that deadline out into the future. I firmly believe that is what ultimately is going to have. So I see the price action in a lot of these credit card companies and I don't think that you want to be selling these names based on a belief that this cap is coming. I think universally we all understand and people in the administration understand that a conversation has to take place regarding what goes on right now with the usage of debt and being financed at the 20 plus percent. But to cap it, I think we all understand is going to lead to an environment in the economy that's going to be very detrimental.

Scott Wapner (24:04)

I'm not a lawyer. I don't even, I don't pretend to be in any venue that I'm in. I'm not sure if there's legal authority to do this by executive action or otherwise to force.

Joe Terranova (24:16)

Don't you have to be a, to be a judge, you have to be a lawyer, right?

Scott Wapner (24:20)

I don't know. I might have gotten a special appointment. I'm not sure if there's legal authority to force these companies to do this by executive action or anything.

Brian Belsky (24:31)

Yeah, that's why we've done. We've owned Visa. Remember, these stocks were safe havens following the whole payment thing in 2022. So you had this major shift out of the payment, like the PayPal's of the world, into these names. So from the strength of the consumer alone, we think that's why you want to continue to own Visa in Visa for business travel going forward. So we haven't changed any of this. Again, we think this is again, we've talked a lot about near term versus long term and the noise side of things. We just don't think it's going to happen.

Scott Wapner (24:58)

Okay, so let's do this. Let's squeeze a break in. We come back, we have our calls of the day. We have a top pick for one of Josh's most recent buys. And we are back in just two minutes.

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Scott Wapner (26:00)

With the times.

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You're playing the loot. Yeah, and it sounds pretty good, right?

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Scott Wapner (26:10)

Based on the February 2025 Nielsen report.

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Scott Wapner (26:37)

AT&T business Wireless Connecting changes everything foreign. Let's run through some calls of the day. Service Titan, big upgrade today. Morgan Stanley to overweight from equal weight named a top pick. The target bumped to 131. It was 125. They see service Titan as an undervalued leader in vertical software with strong growth potential and margin expansion. Josh Brown, you own the stock, which is down about 6, 16% or so in a week.

Josh Brown (27:09)

Yeah, I haven't started to add to it yet, but I will be. I love this call and I love the opportunity that's been created in this across the board software sell off because they've knocked down stocks like this that have literally nothing to do with the challenge from AI. The customer base of Service Titan are the people who are digging your pools and doing your driveway and raking your leaves. And any kind of service industry professionals that you can imagine. Large companies, small companies, private equity backed, mom and pop, you name it. What all of them have in common is two things. Number one, they absolutely need to modernize their billing, their appointment scheduling, etcetera in order to compete in the modern era. And number two, I promise you this, none of them are going to sit around Vibe coding an app to replace what they're buying from Service Titan. It is just not a real threat. So this name came, got pulled down by people who are across the board selling software stocks. It's in all these baskets. It has no. The selling has literally no meaning. They have done nothing but outshine expectations since coming public. And I do think there are a whole bunch of stocks just like this that will be opportunity opportunities once the dust settles.

Scott Wapner (28:27)

You got some nice calls today too on Shaq and Toast.

Josh Brown (28:31)

Both were, yeah, it's like my birthday.

Scott Wapner (28:33)

Yeah, that's right. Morgan Stanley ups Shaq to overweight.125 is where they put the target. Toast got upped at Evercore. Their price Target there is 40.

Josh Brown (28:47)

Yeah, let's take those backwards. Toast is a category killer. They now have the biggest market share. I think it's 140,000 restaurants on their platform. People understand the handheld device is a trojan horse just to get into the restaurant. And yes, of course, they are being paid every time somebody pays a check at a restaurant. But what's more important is once they're in there, they spread out horizontally, get their tentacles into everything. They're involved in the food ordering system that the chef uses, they're involved in the payroll software system that the owner of the place is using and anything else you could think of. Again, very similar to Service Titan. Restaurant owners are not Vibe coding their own apps. This is not at risk of AI disruption, never going to happen. Instead it is the dominant platform, will remain dominant and will continue to build both enterprise customers and locations. So I think it's a, I think it's a stupid sell off and I'm remaining long on shock. Look, this is very different type of situation. It's not software related. I just think it's a misunderstood growth story. I know Belsky's in the name as well, so I'll cede my time to him.

Scott Wapner (29:59)

Okay, thank you. So you want to give me something quick there? And by the way, Delta's target, which you also own, was raised today as we wait for United. Their earnings are coming, I think in over time tonight or in the next 24 hours.

Brian Belsky (30:12)

We'll start with Shaq. I just think, you know, Josh talked about category killer and toast. I think Shaq's a category killer in the consumer discretionary restaurant business in small mid cap. I do believe that for over a near term basis, a bit of a broken growth story because people are worried about that they're growing too fast. We actually like their growth trajectory and how they've managed that. With respect to Delta, Delta is the best in brand, best airline in the world. Amazingly managed operationally. Fantastic. In terms of, you look at ROE and ROA on that company. Amazing. And so the way that they've managed their fleet and how they, how they've expanded it and invested in it, Delta is the one they own.

Scott Wapner (30:53)

What's roa?

Brian Belsky (30:54)

Return on assets.

Scott Wapner (30:56)

Okay. You think everybody just knows that. I don't. They could.

Brian Belsky (30:59)

I mean, you know, they could. They're very astute. Return on equity.

Scott Wapner (31:04)

What's roi?

Brian Belsky (31:05)

Return on investment. You talked about it earlier. Now how about a return on invested capital? What about dividend yield? Now the people that watch this show are educated, they're smart. Let's go.

Scott Wapner (31:15)

All right, TKO Group 233 from 227 outperform at Wolf.

Joe Terranova (31:21)

You got that? This is a name in the communication services sector that gives you the type of growth that you used to only be able to find from names like Alphabet and from Netflix. Unfortunately, the stock has pulled back here to the very supportive moving averages. Why? Because recent earnings report, the comps on UFC were really hard. It is a buying opportunity. Look into 2026. This is a free cash flow machine. Deals with ESPN, deals with Paramount, WWE, UFC. Live sports programming only accelerates into 26. And sponsorships, which is 10% of their business, is expected to grow 65% in 26. I think you buy the name.

Scott Wapner (32:02)

All right, the news with Kate Rogers. Hi, Kate.

Liz Thomas (32:05)

Good morning, Scott.

Kate Rogers (32:06)

Belarus in the United Arab Emirates said today that they will join President Trump's proposed Board of Peace for Gaza. While Norway declined the invitation. The organization would oversee the post war reconstruction and governance of Gaza and then expand to deal with other conflicts. France also turned down the offer to participate as governments worldwide cite concerns about undermining the United Nations. Spain began three days of national mourning today as rescuers still search for victims of a high speed train crash on Saturday. The official death toll rose to 41 this morning, but authorities warn it could be higher. The cause is still under investigation, and Representative Julia Letlow announced today she will run for Senate in Louisiana against fellow Republican Bill Cassidy. The midterms will be the first time he faces elections since voting in 2021 to convict President Trump on impeachment charges following the January Six Capitol riot. Ludlow's announcement comes after the president said he would endorse her if she entered the race. Scott, back over to you.

Scott Wapner (33:05)

All right, thanks. It's Kate Rogers. Coming up, today's bounce in energy and a spike for natural gas. And there are stocks moving as a result of that plus one big oil name. The company debates the trade next.

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Joe Terranova (33:53)

AT&T business Wireless coverage, our delivery GPS wasn't the most reliable.

Brian Belsky (33:58)

Once our driver had to do a 14 point turn to get back on route.

Joe Terranova (34:02)

A 14 point turn.

Brian Belsky (34:04)

An influencer even livestreamed the whole thing.

Scott Wapner (34:07)

Not good for business.

Brian Belsky (34:09)

Now with AT&T business Wireless routes are.

Joe Terranova (34:11)

Updating on the fly and deliveries are on time.

Brian Belsky (34:14)

And the influencer did get us 53 new followers though.

Scott Wapner (34:17)

AT&T business Wireless connecting changes everything.

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Scott Wapner (34:55)

We'Re back. Natural gas is surging today. Energy's leading the sector race so far this year. So energy's up 7%. A lot of names, Joe, in the Nat Gas space are rallying today as NAT Gas does too. You own equity. Is that the best name?

Joe Terranova (35:12)

Look, I've owned equity for the last several years and I've owned it in an environment where natural gas prices were in a significant downtrend. You know, today's spike is clearly on Weather. And I don't think that you're stepping in to buy natural gas names specifically today based on weather. I do think you want to own natural gas for the fundamental story that will evolve over the coming years as it relates to being a solution for the power generation.

Scott Wapner (35:38)

Demand in the near term though is, you know, better. Way better than me and I think better than most. Weather obviously is the biggest variable in the often in the short term movements of a natural gas positioning. If you look at, you know, you go all over the place today and people are showing the weather map of the United States and like look out. Yep, there's a deep freeze and big snow coming to a large swath of America and then nat gas goes up on that. That's a real thing.

Joe Terranova (36:07)

That's a real thing in the near term. And if you have the ability to sit in front of your computer and to profit from that, congratulations, knock yourself out. I did it in the past, sometimes successfully, most of the times unsuccessfully. But I will tell you this about natural gas fundamentally, this is going to be a solution in the long term. Now as it relates to energy overall. Having natural gas right now participate when it was sitting off to the sidelines, it really plays well into the narrative that energy can be one of the leading sectors in 2026. And that comes also from the standpoint of positioning right now, everyone short.

Scott Wapner (36:44)

One company I want to highlight today is Southern Company. It's one of the most diversified energy companies downgraded today to a sell. Essentially it's underweight from equal weight. At Wells Fargo, the target goes to 84 from 97. Brian Belsky, you own the name.

Brian Belsky (36:59)

3.3% dividend yield. Cash flow yields are above the dividend yield. We think that the original old fashioned utilities are a great place to play because they're the ones that are actually again, they have the cords, they have the plug ins, they've got all the infrastructure for the AI power trade. We like the stock a lot longer term.

Scott Wapner (37:19)

Liz Thomas on energy.

Liz Thomas (37:21)

I like energy stocks partially because of natural gas, but partially also because they've been able to do well even with oil prices where they are and oil prices not really finding much upside. I think that this is a year where energy stocks will decouple from oil prices generally and we will continue to see volatility in the oil trade. But I think energy itself can do well.

Scott Wapner (37:42)

All right, we are going to take a break and then get ready because we're doing Josh Brown's best stocks in the market. He's talking about Buying opportunities today in one of the best trades of 2025. That's next. It is time for best stocks in the market according to Josh Brown. The spotlight today shining brightly on the utilities because there's a lot of power behind that. But I'm bum. What do you got?

Josh Brown (38:17)

See what you did there?

Scott Wapner (38:18)

Yeah.

Josh Brown (38:19)

Like what you're putting down. Judge.

Scott Wapner (38:21)

Thank you.

Josh Brown (38:22)

The utility sector did almost as well as the S&P 500 last year in total return. And that was a really big surprise. And obviously it was completely unexpected because these companies became part of part of the trade. It was like one of the least likely ideas you could think of for a historically defensive sector to start acting like a growth sector. But as a result a lot of these names ended up on the radars of people that never looked at a utility in their entire lives just prior. Unfortunately they've pulled back. We're in probably like a 10% pullback for the group. But I think that's created opportunities. So Sean and I at CNBC Pro took a look at three names that are holding up the best and here they are. The first one is American Electric Power. That's aep. This is probably. I think I called it a B minus in the column. Technically fundamentally it's an A. You got a 3.12% dividend. I just don't think this would be the one I would buy. However, it is still on the list than it is holding above its 200 next era I like better any I know this is also a Belsky name. It's half Florida power and light and then it's half clean energy and some of the other resources that are really important right now for the the data center power. This one looks a little bit better. I think you've got 78 is is the level that you want to keep an eye on. If it breaks below 78. That had been support for a really long time and that would tell you that something's changed. So long as it stays above I think the stock is fine resistance like 87, $88 a share. That'll be the next challenge. Last one. Sempra SRE. This is California. It's Texas. It's electric. It's also natural gas. This is my favorite of the three. I think that this is a stock that you can buy right here. You don't have to wait. You can see it is now triggering that 50 day moving average sort of as like a little bit of a level. But the big picture here is this is probably going to 100 bucks.

Scott Wapner (40:26)

Okay. That's at 90, 50 right now. NextEra, what you have Ms. Jabelski?

Brian Belsky (40:31)

Yes. You know I got teased a little bit to be overweight utilities in 2026. I haven't been overweight utilities with sector opinions for a long time since probably my Merrill lynch days. And I think the reason is, is because for the most part debt has been so heavy in these names. Scott and Nextera I couldn't wait to buy. I bought it in 2020 after the big pullback because Nextera was a huge hedge fund darling back then. We've owned it since then and then we've been adding slowly Southern company. We talked before Centerpoint Energy, some of the mid cap stuff. So we really think that at the end of the day utilities are a great AI play at.

Scott Wapner (41:10)

What part of your 30 year career was Merrill on the. On the resume?

Brian Belsky (41:16)

Right in the middle.

Scott Wapner (41:17)

Yeah, yeah. Okay. Just like to keep track.

Brian Belsky (41:20)

You know I don't talk about that anymore.

Scott Wapner (41:21)

Yeah, I know. What do you mean the Merrell, you.

Brian Belsky (41:23)

Don'T talk about it anymore, 30 year plus anymore?

Scott Wapner (41:26)

Well, I do because you don't.

Liz Thomas (41:28)

Somebody has to.

Scott Wapner (41:30)

Mike Santoli's. All right, we're back. Senior markets commentator Michael Santoli is here now at post 9. This has been in many respects as we said at the top and ignore the noise market at some dark periods or theoretically. So the light has shined through in short order.

Michael Santoli (42:11)

Yes. Well the way I got is the market is trying to get off easy and it's trying to protect these levels that would keep this a very routine little episode. That would be we three times go to 4.3% of the 10 year this morning, then it gets bought, yields come back in, we kiss 20 on the Vix, comes in from there, almost get to the 50 day moving average in the S and P. Not quite. We bounce from there. We go back to break even on the year. That's where we are on the S and P. And everyone's happy that we're going to hold that level. And I think that that is perhaps a sign of resilience and the fact that the investors are not going to be pulled away from the baseline case that we have a reaccelerating economy. Earnings are going to be good. Maybe the Fed can cut the whole premise. I do think though that we don't have a whole lot of an uncertainty premium built into this market. And if events dictate that we need more, we're going to talk about it. Meanwhile, if you're an index investor, you're flat since Late October. And so, you know, is it meaningful that the S and P made all these approaches at 7,000, couldn't get there. Is it just reloading or, or is it tired?

Scott Wapner (43:18)

It comes down to I guess whether, you know, the so called own goals which have happened at periods of time are still followed up by winning the game. It's happened at every, you know, with the Liberation Day own goal, as as many have have called it was quickly reversed. We scored a lot of goals on the other side. The market had a good year and.

Michael Santoli (43:39)

Boy, in retrospect, wasn't it easy to buy, you know, so you got down 20%. We didn't have a 2% from an all time high pullback, which is what we've had right now. And so I do think, you know, if we're going to have to kind of tense up in advance of something that is consequential, we haven't done it yet. We might not have to because guess what today was the credit card cap deadline.

Scott Wapner (44:00)

Right.

Michael Santoli (44:00)

And nobody's talking about it because it's going to go away.

Joe Terranova (44:03)

Right.

Michael Santoli (44:03)

So I think that's the hope.

Scott Wapner (44:04)

All right, so we'll see you at 3 for your last word. And we're all excited to see you at 4.

Michael Santoli (44:09)

All right, same here.

Scott Wapner (44:10)

Looks like you got a new tie on. I don't haven't seen that one before. Looks like you're ready to rock and roll with Mel.

Michael Santoli (44:14)

I got a new haircut. Let's not go crazy.

Scott Wapner (44:17)

We'll talk more at 3, but we're looking forward to that. Michael Santoli, of course. The setup is next. Let's get the setup. We do have some key earnings within the next 24 hours. I mentioned United reporting after the bell. Belski, you've got that but you already gave us the case on, on Delta.

Brian Belsky (44:40)

Yep.

Scott Wapner (44:41)

Charles Schwab reports tomorrow before the bell, which you have. Take that one.

Brian Belsky (44:45)

I love Charles Schwabe because it kind of tripped on itself last year. It's a great value name. I think from a wealth perspective they continue to see these assets pour in. We love the platform and we think that the yield is also a great play that some of the other big ones don't have.

Scott Wapner (44:59)

Okay. Interactive Brokers, that is after the bill today. Joe, you own the stocks.

Joe Terranova (45:04)

Stock is near an all time high. This is one of my favorite names.

Scott Wapner (45:07)

Don't wait for me to finish. Just go.

Joe Terranova (45:08)

No, just go. Charles Schwab Interactive brokers. Goldman Sachs, CME Exchanges Brokers, 2026 own them in a volatility environment.

Scott Wapner (45:18)

JNJ Belsky go.

Brian Belsky (45:20)

Loved it with the big pharma stocks last year debacle. This stock held in there. We really, really like it.

Scott Wapner (45:25)

Prologis tomorrow before the bell. Belsky go.

Brian Belsky (45:28)

Same on. We're talking about massive supply coming on the market. We think that the data centers are a great, great play as well.

Scott Wapner (45:36)

Travelers tomorrow before the bell.

Joe Terranova (45:38)

Joe go lost its upside momentum. Catastrophic loss is going to come in somewhere around 250 million. That's a big number to watch.

Scott Wapner (45:45)

Truest is before the bell tomorrow.

Brian Belsky (45:47)

Belsky, one of those regional banks I think are going to win in the consolidation battle. We think more growth coming there and they've got a great, great commercial bank as well.

Scott Wapner (45:55)

All right, final trades are next.

Joe Terranova (46:02)

Are you following the Halftime Report podcast?

Josh Brown (46:04)

What are you waiting for?

Joe Terranova (46:06)

Look for us in your favorite podcasting app. Follow the Halftime podcast now.

Scott Wapner (46:16)

We'll wrap up the trading session. Adam Parker, Cameron Dawson Young Yuma Jason Snipe for Netflix, Alex Cantrowitz and J.P. morgan's Matthew Boss. That's 3 o' clock Eastern Time, of course, on the closing bell. I hope you join me then. Josh Brown, your final trade today is what?

Josh Brown (46:33)

Reiterate toast. I like the price action today.

Scott Wapner (46:36)

All right, Brown reiterates a buy on toast. Stocks up 1/2 of 1%. Brian Belsky.

Brian Belsky (46:42)

Took me 30 plus years to like utilities. Southern Company. I love Southern Company.

Scott Wapner (46:47)

What took you so long?

Brian Belsky (46:48)

I don't know. Stubborn.

Scott Wapner (46:49)

All right, what other places you been? Merrill, bmo, Piper Piper.

Brian Belsky (46:55)

Yep. Dane, think about that.

Scott Wapner (46:58)

What a career. What a run.

Liz Thomas (47:00)

Liz Thomas, reiterate software. I think this sell off is undo and software has a chance this year.

Scott Wapner (47:07)

All right, well, Joe buying Twilio again today as we recapped at the top of the program or near there. Joe T. What do you got for your final?

Joe Terranova (47:15)

This is not a final trade. This is a final hedge. It's a hedge against the portfolio. I hope I'm wrong, but I'm going to buy the TBT on the belief that yields go higher.

Scott Wapner (47:24)

I mean, it is a trade. Trading it.

Joe Terranova (47:26)

It is, but I'm doing it as a hedge.

Scott Wapner (47:29)

Well, we still have to make the trade for it to be a hedge.

Joe Terranova (47:31)

Very true.

Scott Wapner (47:31)

I'll see if that's correct. You've been listening to CNBC's Halftime Report, the podcast. You can always catch us live weekdays at 12 Eastern only on CNBC.

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